Financial Conduct Authority Loyalty Penalties in Insurance Market. 2022-12-20
2022-12-20
TAGS
Response quality
Questions & Answers
Q1
Direct Answer
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Context
The MP is questioning the Financial Conduct Authority's measures to protect insurance customers from loyalty penalties.
What recent assessment has been made of the effectiveness of the Financial Conduct Authority in protecting customers from loyalty penalties in the insurance market?
The Government welcome the Financial Conduct Authority's pricing rules, introduced in January this year, which require insurers to offer a renewal price no greater than the price the firm would offer to a new customer for the same policy. The Financial Conduct Authority has confirmed there is no evidence of widespread non-compliance with those rules.
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Assessment & feedback
Response accuracy
Q2
Partial Answer
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Context
The MP contrasts the effectiveness of FCA measures in insurance markets to the less successful energy price cap.
Given that the Treasury is spending vast amounts on energy subsidies, will my right hon. Friend speak to BEIS about replacing the failed energy cap with a version of the FCA's approach as soon as energy prices return to normal?
I am very happy to look at that question further. The Government previously considered, but rejected, asking Ofgem to implement a relative rather than an absolute price cap in energy markets because it was judged that it would distort competition in the fixed-term tariff market.
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Assessment & feedback
Replacing the failed energy cap with FCA's approach
Because It Was Judged That It Would Distort Competition
Response accuracy
Q3
Partial Answer
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Context
The MP is concerned about the timeline of consultations regarding financial services regulation and fears lessons from the financial crash might be overlooked.
Given that many consultations closed very quickly, how can we be convinced that the painful lessons of the financial crash have not been forgotten?
For four and a half years, I was the Economic Secretary to the Treasury, and many of those reforms were baked up over a lot of consultation with industry over many months. The Edinburgh reforms represent an incremental advance on those reforms and have high prudential regulatory standards very much at their core.
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Assessment & feedback
The quick closure of consultations
Many Of Those Reforms Were Baked Up Over A Lot Of Consultation With Industry
Response accuracy
Q4
Partial Answer
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Context
The MP is concerned about the potential weakening of regulatory standards and international confidence in UK's financial system.
Given the intention to review capital requirements, how will the Chancellor ensure the regulatory focus on stability is maintained?
I heartily agree with its conclusions. Stability is at the core of the regulators' objectives, but also developing frameworks in line with expectations so that we can remain a world-leading global hub for financial services.
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Assessment & feedback
Ensuring regulatory focus on stability remains unchanged
But Also Developing Frameworks
Response accuracy